Results 1 to 2 of 2

Thread: housefees vs. tipouts

  1. #1
    Veteran Member LilMissSophie's Avatar
    Joined
    Apr 2004
    Location
    PA
    Posts
    201
    Thanks
    3
    Thanked 33 Times in 22 Posts

    Default housefees vs. tipouts

    In relation to taxes, I already know that housefees are tax deductible, and tipouts are not -- unless you pay more than $700 and have the person you are tipping out to give you their information and file a 1099, etc. (correct me if I'm wrong here...)

    What I don't understand is, in the club that I have just started out at, we have a mandatory "tip-out" each night of $15. Which, okay is not a whole lot but it adds up, considering I'm only making $100-$150 a shift at most. How can tipouts not be tax deductible if they are mandatory? Or is my club confusing this with a housefee? If so, does that mean I should tip out a little extra? I don't understand. I don't want to come off as cheap and/or greedy, I like to tip accordingly...but I'm not understanding the tax aspect of it.

  2. #2
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: housefees vs. tipouts

    How can tipouts not be tax deductible if they are mandatory?
    legally speaking, clubs can not 'mandate' that independent contractor dancers tip independent contractor bartenders / dj's / bouncers etc. If dancers agree to do so, in the eyes of the IRS they are making a 'voluntary gift' to persons who are not officially associated with the club, which is not tax deductible.

    Clubs can 'mandate' that independent contractor dancers tip bartenders / dj's / bouncers who are actually employees of the club. However, to go along with this, by the letter of the law the club is obligated to provide a receipt to dancers for these tipouts, and also obligated to run this tip money through the club's payroll system prior to actually paying out the after-tax proceeds to the employee bartender / dj / bouncer as an addition to their weekly paychecks.

    The point here is that lots of clubs DON'T follow the letter of the law where taxes are concerned. Typically the clubs try to force dancers to accept income and fee arrangements which minimize the taxes due on club income and maximize taxes due on dancers' income. Unfortunately if a dancer complains about this to the club, and in the process communicates the fact that she intends to fully report her income and take full advantage of her business expense tax deductions for house fees and tipouts, the reaction usually falls somewhere between total deafness, intimidating the dancer, or firing the dancer ASAP !

    Also, if the IRS decides to audit the dancer(s) and the club if and when tax return discrepancies turn up in IRS computer cross-checks, the club is usually in a position where they can plead ignorance and blame all of the improper income reporting problems on the dancer(s).

    The fact that some dancers working at any given club will choose not to report their incomes, or choose to underreport their incomes, makes it all the more difficult for dancers who are trying to do the 'right thing' in regard to their taxes. From the standpoint of a 'shady' clubowner, nothing is better than a dancer who doesn't report their income (or house fees, or tipouts, or private dance earnings) at all - for obvious reasons ! On the flip side, nothing is worse than a dancer who wants to follow the 'letter of the law', report her tip and private dance income, and claim her house fees and tipouts - for the same obvious reasons.

    ~
    Last edited by Melonie; 04-10-2007 at 07:46 PM.

Similar Threads

  1. stupid ass housefees make no sense
    By happygiggles in forum Stripping (was Stripping General)
    Replies: 10
    Last Post: 03-21-2009, 09:57 PM
  2. Lower Housefees During the Summer
    By MysteriousMisty in forum Stripping (was Stripping General)
    Replies: 8
    Last Post: 07-28-2008, 02:29 PM
  3. Can I deduct my housefees without receipts?
    By SydneyII in forum Dollar Den
    Replies: 3
    Last Post: 02-12-2008, 05:32 AM
  4. Tipouts and Ethics?
    By smurfalicious in forum The Lounge
    Replies: 29
    Last Post: 12-07-2003, 07:45 AM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •